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5 Factors to Consider Before Investing in Electric Vehicles


Electric vehicles (EVs) are growing in popularity and being considered in major transit operations, including school districts. If you’re looking to go electric with your school bus fleet, it’s important to do your homework not only on buses but also everything that goes into keeping them road ready. Here are five important risk management considerations to protect your investments.

1. Coverage Considerations

Electric buses cost between $350,000 and $400,000, compared to diesel and propane buses at $65,000-$100,000. The price tag associated with electric buses requires extensive budgeting, likely grant funding, and additional financing. But what about the implications to your annual auto coverage costs?

Coverage providers calculate rates using multiple variables, including total vehicle cost. In the event of a total loss, it will cost your coverage provider more to replace a $350,000 electric bus than a $90,000 diesel bus. So, you should expect to pay more for your coverage.

2. Approved Specifications 

Most major manufacturers offer several models of electric buses and sell them across the country. In Texas, school buses must meet school bus specifications approved by the Texas Department of Safety (DPS), whether they’re purchased out of state, at an auction, or through a purchasing cooperative. These approved specifications are the minimum requirements. Cities and counties may have additional requirements that address school bus operation, and buses must meet all Federal Motor Vehicle Safety Standards.

A DPS representative recently mentioned that some electric school buses being sold on purchasing cooperative sites and displayed at a Texas school district conference did not meet state specifications. If you plan to use a school bus for its intended purpose, your district is responsible for ensuring it meets all required standards, including approved specifications. Your coverage provider has no control over whether purchased vehicles meet approved specifications, and coverage will not be extended to vehicles that fall short of standards.

3. Facility Infrastructure Needs

Vehicles are just one component of any plan to roll out an electric fleet. Your financial calculations must include the upfront costs of battery-charging infrastructure, utility upgrades, and facility modifications.

The charging infrastructure should fit your needs and constraints. Necessary service upgrades will depend on factors such as how many buses will charge at the same time and at what power level. It is important to remember that you will incur incremental costs and infrastructure requirements as fleet size increases.

Try to avoid a piecemeal approach where you install charging infrastructure for two buses this year, and then add the same for two more buses the following year. You run the risk of under-sizing your infrastructure needs, forcing you to rip up your infrastructure and start over. It’s more cost-effective to look several years in the future to assess your needs.

Similarly, your electric utility provider can help you evaluate your infrastructure needs, taking into account rightsizing interoperability, site design, and charging layout. Charging infrastructure must be compatible with bus type, so work with your transportation department and bus manufacturer.

Because electricity rates fluctuate, locking in your rates may help control operational costs. Significant facility infrastructure upgrades, however, will likely have the opposite effect on your property coverage. Just like more expensive vehicles could increase your auto exposure, installing expensive equipment could increase your property exposure. Talk to your coverage provider for more information.

4. Impact to Staff

The safe maintenance, storage, and operation of electric buses will require you to hire new staff and/or train existing staff. Less than 1% of the nearly 500,000 school buses on the road today are electric, so there is a shortage of fleet operations professionals who have experience maintaining them. Increasing utilization of this new technology calls for new training on high voltage batteries, electrical systems, and maintenance considerations.

Look to your bus manufacturers and the Texas Association of School Bus Technicians for opportunities to develop fleet operations staff. You will find classes, workshops, and certification programs to ensure your fleet investments are well maintained and your staff is adequately equipped as technology changes.  

Drivers will also face a learning curve when it comes to new behind-the-wheel techniques and vehicle handling, along with charging protocols. Every electric bus has an expected range, but climate (lower range in cold and hot temperatures), driving behavior, terrain, and rider volume impact that range. These external factors will result in varied range projections. You should track ranges over time to facilitate variance predictability and eventual mitigation of service impacts.

5. Safety Risks

It’s impossible not to discuss the potential for harm to people and property that comes with electricity and batteries. Vehicle and charging infrastructure fires involving batteries present unique challenges to firefighters and responding staff. The increased risk of fires is why electric school buses are fitted with early detection/isolation systems to prevent uncontrolled ignition to neighboring batteries.

  • Bus manufacturers publish emergency response guides for their vehicles. Make sure firefighters, first responders, and appropriate staff can access your guides.
  • Update your emergency operations plans to reflect new hazards and protocol for proper use and emergency response.
  • Train employees to safely charge electric vehicles and respond to charging station fires. Training should include specific battery chemistry. For example, lithium-ion batteries have the potential for delayed ignition or reignition of a battery fire, even after it is believed to be extinguished.
  • The National Fire Protection Association offers training and information to supplement your training program.

Pro tip: Research other standards and requirements—fire code, building code, and any requirements from your coverage providers. Collaborate with your local fire department and other first responders

Who Should Have a Seat at the Table?

If you are considering a move to electric vehicles, make sure you plan appropriately and collaborate with the right stakeholders. Examples include transportation leadership, fleet operations staff, risk management, facilities and maintenance leadership, finance staff, local first responders, and electrical utility providers.

Do not underestimate the fear associated with increased reliance on technology. Staff who already feel underappreciated or left out of important decisions will likely wonder if they are being replaced by technology.

This article barely scratches the surface of this complicated topic. Further reading is recommended, and the US Department of Energy compiled an extensive list of related resources.

Joanie Arrott
Assistant Director, Risk Solutions

Joanie Arrott joined TASB Risk Management Services in 2009 after serving five years with TASB Facility Services. She leads a team of regionally based consultants who specialize in controlling workplace accidents, property damage, vehicle collisions, and other risks in Texas public schools.